With the U.S. economy grappling with persistent energy shocks and rising electricity costs, inflation expectations for the next five years have climbed to their highest levels in four years. For financial advisors, the challenge is shielding client portfolios from eroding purchasing power. Now is an ideal time to consider ETFs designed to help combat the effects of inflation on portfolios.
The Producer Price Index (PPI), a key barometer for wholesale inflation, surged to a 6% annual rate in April 2026, marking its highest reading since late 2022. This followed a hotter-than-expected Consumer Price Index (CPI) report, which saw headline inflation climb to 3.8% year-over-year, up from 3.3% in the prior month.
Key Takeaways
- PPI jumped to 6% in April, suggesting that higher production costs are still working their way through the supply chain.
- Energy prices rose 3.8% month-over-month, while retail electricity prices are rising at double the pace of headline CPI.
- Advisors are increasingly utilizing multi-asset real return ETFs and natural resource funds to mitigate specific inflationary risks.
Moving Beyond Traditional TIPS
While Treasury Inflation-Protected Securities TIPS remain a foundational hedge, the current inflationary environment – characterized by supply-side shocks and commodity volatility – has led many to seek more dynamic solutions. Traditional TIPS can struggle during periods of rising real interest rates, even if inflation is elevated.
Instead, many advisors are turning toward real assets that possess intrinsic value and pricing power. This includes exposure to commodities, infrastructure, and natural resource equities. According to recent data, the S&P Global Natural Resources Index is currently outpacing the S&P 500 by over 12% year-to-date, highlighting the strength of the sector.
Notable entries in this category include the Amplify Energy & Natural Resources Dividend Income ETF (NDIV ), which uses a covered call strategy to provide a yield of over 10%, and the FlexShares Morningstar Global Upstream Natural Resources Index Fund (GUNR ), which focuses on the upstream portion of the supply chain where pricing power is most concentrated.
Inflation ETFs & One-Ticker Solutions
For a diversified approach, several ETFs combine inflation-linked bonds with equities and commodities. The AXS Astoria Real Assets ETF (PPI ) is a prime example of an integrated strategy. PPI invests in a mix of inflation-sensitive sectors, including energy, industrials, and materials. Its top holdings, which include gold (via GLDM) and global energy giants, are designed to benefit directly from the rising costs of raw materials.
Another option is the State Street Multi-Asset Real Return ETF (RLY ). This fund provides a one-stop inflation hedge by diversifying across natural resources, global infrastructure, commodities, and inflation-linked bonds.
Another single-ticker solution that spans both TIPS and equities is the WisdomTree Inflation Plus Fund (WTIP ). Traditional TIPS funds that have struggled with rising real rates. However, WTIP includes a commodity overlay that has helped it significantly outperform broad TIPS benchmarks in early 2026.
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VettaFi LLC (“VettaFi”) is the index provider for NDIV, for which it receives an index licensing fee. However, NDIV is not issued, sponsored, endorsed, or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of NDIV.
